This
is an appeal by special leave against the judgment of the Bombay High Court
upholding the liability of the appellant Insurance Company to pay the amount of
the appellant Insurance Company to pay the amount of compensation awarded to
respondent No.1 who had suffered some injuries as a result of an accident.

On 4th July, 1979, an accident occurred involving two
scooters. One scooter No.(MTM 6327)was being driven by respondent No.1 (the
claimant )and the other (BYZ 5348) was being driven by respondent No.3. As a
result of this accident respondent No.1 suffered some injuries and he filed an
application before the Motor Accident Claims Tribunal for compensation.

The
appellant contested the said application. It was contended on its behalf that
on 22nd July, 1977, respondent No.3 had obtained a
learner's licence, which enabled him to drive for the purpose of learning to
drive. The validity of this learner's licence had expired on 21st November, 1977.

When
the accident took place on 4th July, 1979,
respondent No. 3 was neither holding a driving licence as contemplated by the
Motor Vehicles Act, 1939, nor was he holding a learner's licence. It appears
that soon after the accident respondent No. 3 obtained a fresh learner's licence
on 7th July, 1979 and thereafter, on 9th July, 1979, obtained a driving licence.

The
Motor Accident Claims Tribunal, vide its award dated 2nd June, 1984, came the conclusion that the
accident had occurred due to the negligence of respondent No.3. It found that
respondent No.1 was entitled to compensation of Rs. 2,60,000/-. An award was
accordingly passed directing respondents 1 to 3 there in, including the
appellant Insruance company, to jointly or separately pay the said amount
together with interest at the rate of 6% per annum.

The
appellant filed an appeal against the said award.

The
main contention which was not duly licensed to drive a scooter, and therefore,
in view of the provisions of the Motor Vesicles Act and clause which had been
inserted in the Insurance Policy, the insurance company was absolved of all
liability. This exclusion clause in the policy which the appellant company
relied up on, is follows:

"Provided
that the person driving holds a valid driving licence at the time of the
accident or had held a permanent driving licence (other than a learner's licence)
and is not disqualified from holding such a licence." The High Court came
to the conclusion that the Act did not contemplate the grant of a permanent
driving licence. It then proceeded to hole that the term `duly licensed' in
section 96(2)(b)(ii) of the Act would include the holder of a learner's licence
if he had once held such a licence then the aforesaid exclusion clause would
not be Applicable.

While
granting leave to appeal this Court made it cleat that the leave was being
granted on the condition that the appellant herein herein would pay the amount
awarded to the claimant, irrespective of the result of the case.

On
behalf of the appellant it has been contended by Mr. Suri that at the time when
the accident of occurred respondent No.3 did not hold any licence. This being
so the aforesaid provisions in the insurance policy and also Section 96(2)(b)(ii)
of the Act absolved the appellant of any liability.

Learned
counsel for the respondent relied upon the observations of the judgment under appeal
and also on a similar view taken in the decision of the High Court of Ram &
Ors. 1985 ACJ 481 and submitted observations of the judgment under appeal and
also on a similar view taken in the decision of the High Court of Himachal
Pradesh in United India insurance Company Ltd. vs. Tilak Ram and others 1985
ACJ 481 and submitted that inasmuch as respondent no.3. had held a learner's licence
at one point of time the insurance company was liable to pay the amount of
compensation which sad been award.

The two
questions which arise for consideration in this appeal are, firstly. whether
the appellant company is entitled to invoke the provisions of Section
96(2)(b)(ii) of the said Act, secondly whither the above quoted exclusion
clause in the insurance policy absolves the appellant company of any liability
in the present case.

In
order to appreciate the first contention, it is necessary to refer to
appreciate the first contention, it is necessary to appreciate the first to the
relevant provisions of the said Act. Section 96(2)(b)(ii), on which reliance is
placed by the appellant, reads as under:

"(2)
No sum shall be payable by an insurer under sub-section (I) in respect of any
judgment unless before or after the commencement of the proceedings in which
the judgment is court of the bringing if the proceedings, or in respect so long
as execution is stayed thereon pending an appeal; and an insurer to whom notice
of the bringing of any such proceedings is so given shall be entitled to be
made a party thereto and to defend the action on any of the following grounds,
namely:

(a)----------------
(b) That there has been breach of a specified condition of the policy, being
one of the following conditions, namely:

(1)----------------------------
(ii) a condition exclusing driving by a named person or persons or by a person
who is not duly licenced or by any person who had been driving licence during
the period of disqualification:

of"
This clause, inter alia, uses the expression "driving licence" which therm
has been defined in Section 2(5A) of the Act as follows:

"Driving
Licence" means the document issued by a competent authority under Chapter
II authorising the person specified therein to drive a motor vehicle or a motor
vehicle of any specified class or description." Section 3 inter alia
provides that no person shall drive motor vehicle unless him. Section 7
provides for the grant of a driving licence and sub-section (6) thereof states
that no driving licence shall be issued to any applicant unless he passes, to
the satisfaction of the licensing authority, the test of competence to drive as
specified in the 3rd Schedule. It is clear, therefore, that a valued driving licence
as contemplated by the said Act would be one id issued in accordance with the
provisions of chapter II of the Motor Vehicles Act, 1939, after a driving test hes
been held. A person who holds only a learner's licence is one who has not taken
the driving test successfully. Chapter II of the Acts does not made any mention
of a learner's licence,except in Section 21(2)(c) which enables the State
Government to frame rules, inter alia, for the issue of temporary licences to
persons receiving instruction in driving. It is in view of this that in the
Bombay Motor Vehicles Rules a permission (Rule 16) has been made, the relevant
portion of which is as under:

"16.Learner's
driving licence- (i) . Sub-Section (I) of Section 3 shall not apply to any
person driving a motors vehicle in a public place during the course of
receiving instruction or gaining experience in driving with the object of
presenting himself for the test required by sub-section (6) of Section 7 so
long as - (i) the driver is the holder of a learner's driving licence in Eorn L
Lt. to those rules entitling him to drive the vehicle.

(ii) +
+ + + (iii) there is besides the driver in the vehicle as instructor a person
duly licenced to drive the vehicle and sitting in such a position as to be able
readily to stop the vehicle." From the aforesaid it is clear that what was
obtained by respondent No.3 from the authorities under the Act was not a licence
within the meaning of Section 2(5A) of the said Act. He had obtained a
learner's licence allowed him to be on the road subject to his fulfilling the
conditions contained therein. One of the important conditions was that if he
was driving a motor vehicle then there must be besides him in the vehicle as an
instructor a person duly licenced to drive the vehicle and sitting insuch a
position as to be able readily to stop the vehicle." It is clear from this
that two learners by themselves cannot be in one car which is which is being
driven by one of them. If the learner having a learner's licence under the
rules is to drive a car then he must have sitting besides in a person who is
duly licensed. This clearly shows that a "driving licence" as defined
in the Act is different from a learner's licence issued under Rule 96. In other
words, a person would be regarded as being duly licensed only if he has
obtained a licence under Chapter II of the Motor Vehicles Act and a person who
has obtained a temporary licence which enables him to leant driving cannot be
regarded as having been duly licensed. The decision of the single judge of the Himachal
Pradesh High Court in United India insurance Company's case (supra) to which he
hes taken a contrary view must be held to have been incorrectly decided.

Apart
from the fact that a learner having such a licence would not be regarded as
duly licensed, the aforesaid clause in the insurance policy makes it abundantly
cleat that the insurance company, in the event of an accident, would be liable
only if the vehicle was being by a person holding a valid driving licence or a
permanent driving licence "other than a learner's licence". This
clause specifically provides that even if respondent No.3 had held a current
learner's licence at the time of the accident, the appellant would not be
liable. In the present case it is case it is clear that the respondent No.3 did
not have a permanent learner's licence before the date of the accident and he
had held only a learner's licence and it leaped nearly two years before the
accident. The High Court observed that the Act did not contemplate a
"permanent diving licence" because a driving licence is valid only
for a certain period after which it has to be renewed. This may be so, but the
use of the words "permanent driving licence" licence" in the
insurance policy was to emphasis that a temporary or a learner's licence holder
would not be covered by the insurance policy. The intention and meaning of the
policy clearly is that the person driving the Vehicle at the time of the
accident must be one who holds a `driving licence' within the meaning of
Section 2(5A) of the Act.

This
being so, we are unable to with the conclusions of the High that the appellant
was liable to pay the amount which had been award in favour of respondent No.1.
For the aforesaid reasons, the appeal is allowed but with no order as to costs.
Having regard to the condition imposed at the time of the grant of special
leave that irrespective of the outcome of this appeal,the amount awarded will
be paid by the appellant to the claimants, no other relief can be granted to
the appellant.